Mitey danger scale: method and scores
Each risk is scored 1–5 on four criteria: severity, frequency, recoverability and controllability. The danger rating is the rounded average, raised to 5 when a risk is both severe and frequent. Every score cites incidents from our library or official warnings. It is an editorial teaching scale inspired by avalanche danger ratings, not an official or statistical rating.
The four criteria
| Criterion | Question | 1 means | 5 means |
|---|---|---|---|
| Severity | When it happens to you, how much do you typically lose? | A small or temporary loss | Usually everything exposed |
| Frequency | How often has it hit ordinary users, judging by documented cases and regulator warnings? | Rare | Common and recurring |
| Recoverability | Once lost, how hard is it to get money back? | Usually recoverable or avoidable by exiting | Almost never recovered |
| Out of your control | How little can your own habits and checks reduce it? | Largely in your hands | Little you can do once exposed |
Rating = round(average of the four), then set to 5 if severity is 5 and frequency is 4 or more. Scores are reviewed when an incident is added to the library or a rule changes on the tracker.
Scores and evidence
| Risk | Sev | Freq | Recov | Ctrl | Rating | Evidence |
|---|---|---|---|---|---|---|
| Rug pulls and scams | 5 | 5 | 5 | 2 | 5 · Extreme | Usually total loss and rarely recovered. Fraud runs through QuadrigaCX, Einstein Exchange, Celsius and Terra; the CSA and Canadian Anti-Fraud Centre warn about crypto investment scams continually. Your own checks help most here. |
| Bridge risk | 5 | 4 | 4 | 4 | 5 · Extreme | Four bridge exploits in the library: Ronin (US$620M, FBI), Harmony (US$100M, FBI), Wormhole and Nomad. Users of a drained bridge rarely control the outcome; Wormhole's recapitalization by a backer was the exception. |
| Smart contract risk | 4 | 3 | 4 | 4 | 4 · High | Contract bugs caused the Wormhole and Nomad losses; Nomad's bug slipped in during an audit. Users can limit exposure but cannot inspect most code themselves. |
| Platform failure | 5 | 3 | 3 | 3 | 4 · High | QuadrigaCX (at least $169M lost; 13% interim dividend), FTX, Celsius and Einstein. Recoveries vary from almost nothing to full claim value. Checking registration and custody terms lowers, but does not remove, the risk. |
| Key loss risk | 5 | 3 | 5 | 1 | 4 · High | Lost or stolen keys are unrecoverable by design. Compromised keys drove the Ronin and Harmony thefts. For individuals it is the most preventable risk: tested backups and separate wallets. |
| Liquidation risk | 3 | 4 | 5 | 2 | 4 · High | Liquidations are a designed mechanism, not an incident: they happen to borrowers in every sharp fall, cost a penalty plus part of the collateral, and are final. Keeping a large health-factor cushion is in your control. The CSA reminded crypto-backed lending platforms of registration requirements on 2025-10-22. |
| Stablecoin depeg risk | 3 | 2 | 4 | 3 | 3 · Considerable | Severity depends on design: TerraUSD went close to zero (over US$40B in losses per the US DOJ), while reserve-backed coins have recovered from brief wobbles. CDIC does not cover stablecoins and the Stablecoin Act is not yet in force. |
| Oracle manipulation | 3 | 2 | 4 | 4 | 3 · Considerable | Mostly hits lending and derivatives protocols through manipulated or stale prices; users rarely see it coming. No case in our library yet; rated on mechanism and the general pattern of protocol exploits. |
| Regulatory risk | 2 | 3 | 1 | 3 | 2 · Moderate | Rules change often (see the rules tracker): platforms like KuCoin and Poloniex were banned in Ontario in 2022, and stablecoin and CARF rules are pending. Usually you can exit or adjust, so direct losses are smaller. |
Limits
- Frequency reflects documented cases and regulator warnings, not a complete count of losses; many losses are never reported.
- Scores describe ordinary users, not professionals with dedicated security teams.
- No score is a prediction about any specific protocol or platform.
Education only. Nothing on this page is financial, investment, tax or legal advice, or a recommendation to buy, sell, stake, lend or borrow any crypto-asset. Crypto-assets can lose some or all of their value and are not covered by CDIC. Canadian rules change: check the dated sources above and talk to a qualified professional about your situation. Full disclaimer.